State colleges must respect tuition pacts

June 27, 2002|by BOB MAGINNIS

The combination of soaring college tuition and a sluggish stock market may put West Virginia's pre-paid college tuition program in the hole by autumn, according to the state treasurer's office. Given how important education is to moving the state forward, finding a solution to this situation is crucial.

Charles Bockway, the deputy state treasurer who oversees the tuition plan, raised the red flag this week, saying that the plan's investments had not earned anything substantial for two years in a row. In three years the plan's investments have averaged a 4.4 percent return, with a tiny .04 percent return for the fiscal year that ended in May.

That's not enough to cover rising costs at state institutions, which increased tuition by an average of 9.2 percent this year. It's no consolation that other states' plans are in the same situation, because West Virginia's program had only a $3.3 million surplus last year and may have none at all this year.

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As a result, parents enrolling newborns this year will pay 18 percent more than they did last year. And barring a stock market turnaround, the increases will keep on coming, according to Bockway.

Could better management help the plan? Perhaps. The state is contracting with the Hartford Financial Services Group to manage the prepaid tuition plan, a move state officials said should save several thousand dollars per year.

The premise of this plan is that it will give people who are unable to pay several thousand dollars out of pocket each year the chance to give their children a college education.

In our view, if parents make a commitment by investing when their children are newborns, the state's educational institutions should honor that, even if earnings don't cover current tuition costs. The parents who pledged to support the state's colleges should be rewarded for their faith with some loyalty from West Virginia's institutions of higher education.